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Study: Bank Revenues Threatened Due to "Unprecedented" Growth of Fintech, Accenture

October 22, 2018, 07:30 AM
Filed Under: FinTech
Related: Accenture, Fintech

As JPMorgan and Goldman Sachs each prepare to launch major new financial technology (Fintech) initiatives, research firm Accenture is warning that increased competition from digital only lenders could put intense pressure on incumbent banks, as they struggle to make strategic investments in their digital future.

New entrants to the banking market — including challenger banks, non-bank payments institutions and big tech companies — are amassing up to one-third of new revenue, which is challenging the competitiveness of traditional banks, according to new research from Accenture.

Accenture analyzed more than 20,000 banking and payments institutions across seven markets to quantify the level of change and disruption in the global banking industry. The study found that the number of banking and payments institutions decreased by nearly 20 percent over a 12-year period — from 24,000 in 2005 to less than 19,300 in 2017. However, nearly one in six (17 percent) of current institutions are what Accenture considers new entrants — i.e., companies entering the market after 2005. While few of these new players have raised alarm bells among traditional banks, the threat of reduced future revenue growth opportunities is real and growing.  

This weekend both Goldman Sachs and JPMorgan made large new investments in fintech initiatives, according to news reports. A story by Reuters reports that Marqeta, a U.S. fintech startup backed by Goldman and Visa, has expanded into Europe; Separately JPMorgan Chase said it is starting development of a new Fintech corporate campus in the early part of 2019, which will be headquartered in Silicon Valley. 

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